State Capitol News

1:20 pm

Tue August 7, 2012

Medical Pot Lottery Held Today

State health department auditors Connie Phillips and Kurt Schulte time the ping pong balls in the Atom Action Bubble Top Bingo Blower used Tuesday to select who gets to operate marijuana dispensaries around the state.

Howard FischerCapital Media Services

Plans are to use one of those machines like the Arizona Lottery. The ping pong balls it pop out will determine which of the 486 applicants are going to walk away with a certificate that awards them permission to be one of the 126 sites where marijuana can be sold. Some areas of the state have no applicants. But the district on the east side of Flagstaff, for example, has 13 alone. State health director Will Humble said just being one of those chosen today is not a license to immediately start selling the drug.

"They still need to get everything up and running," Humble warned. "Inventory control. Security. The IT infrastructure. The computer infrastructure, etc. They ask for a final inspection. And then at that point we'd be able to issue the operating license which allows them to open their doors."

Today's dispensary lottery is proceeding despite a formal legal opinion late Monday by Attorney General Tom Horne. He said it's illegal for the state to license anyone to sell marijuana.

"There are two cases on point," Horne said. "One is from 2010 and one is from 2011. So they're recent cases. And they're on point. One is from Oregon, one is California. And those cases say that a state law cannot authorize a violation of federal law."

Horne wants to get the issue in front of an Arizona judge who he presumes will rule the same way. He may already have a ready-made case. In June, White Mountain Health Center sued Maricopa County after officials would not act on its request for a registration certificate to operate a medical marijuana dispensary in the unincorporated area of Sun City. Without such a certificate, state health officials will not issue a dispensary license. But the board of supervisors, acting under advice from County Attorney Bill Montgomery, refused to let their employees take any action on any permit that would involve violation of federal laws. Jeffrey Kaufman who is representing the health center, said Horne is legally off base in his conclusion -- and his reliance on those two cases.

"This is exactly the same thing that has been raised over and over again in some of the 16 other jurisdictions that have medical marijuana laws," Horne said. "It has never been decided by a state supreme court or, I don't even think, a district court, or certainly a high federal court."

Horne told Arizona Public Radio he's not halting today's dispensary lottery, particularly since it simply gives the go-ahead for winners to pursue clinic construction and operation before they can get an actual operating permit. But he said those who get the go-ahead today should be aware that it all could be taken away.

"I'm advising the dispensaries that there's going to be an effort to get an accelerated opinion from the court and the court gives at least respectful consideration of attorney general's opinions," he said. "So they're advised that they shouldn't be investing money until they see what the court does."

All that means is it remains possible that individuals and companies that have put up their $5,000 application fee and spent money acquiring a site could end up losing it all. Humble said he's not apologetic for going ahead with the drawing and even taking the money.

"If they didn't understand the risks that were involved in terms of conflict between state and federal law, they certainly should have been better informed," Humble said. "Because, from the very beginning, it's been really, really clear that the Arizona medical marijuana act is in conflict with the Controlled Substances Act at the federal level."

And Humble said those who want to go into the business of selling medical marijuana have made a choice.